We have all been reading about the difficulties in the commercial real estate markets. Over-building, reduced rents, fewer potential tenants, lack of available financing, large and high profile defaults, reduced appraised values, and aggressive banking regulators all affect this important segment of the economy. Since this asset class tends to be financed with loans that mature every five or seven years, many existing loans will come up for renewal in 2010. As a result, this will be a pivotal year.

We believe there has been too much money chasing this asset classification for some time and it has led to over-development and rampant speculation. We are going through an adjustment period that will be difficult for our economy and for commercial real estate owners. Unfortunately, there is no easy answer to this problem and we all might just might need to survive (as opposed to prosper in) this difficult period.